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A variable annuity (VA) offered through a joint venture between Allstate Insurance Co. and Putnam Investments is offering options that give annuityholders flexibility when they convert their contracts into a lifetime income stream.

The number of people who plan to annuitize

is about to "explode."

Putnam Allstate Advisor has introduced "Retirement Income Strategies," a program in which annuityholders can choose features that spare them from drawbacks when they annuitize — which means to convert an annuity into a lifetime income stream.

Traditionally, an annuityholder loses two options upon annuitization. First, most annuities will not allow withdrawals from a contract once the owner receives monthly payments. Second, beneficiaries don't receive a death benefit if the annuityholder dies while receiving monthly payments. The Putnam Allstate Advisor VA allows customers to do either.

Investors may choose one of the following options at no cost when they annuitize the Putnam Allstate Advisor VA (you cannot purchase other options):

The ability to access more money. This feature allows you to make partial withdrawals from your annuity if you need more than your monthly payment. You can access as much money as you want, but your monthly payments will be reduced.

The ability to modify your monthly income stream.This allows you to shorten or lengthen your payment period for term-certain contracts. For example, if you purchased a 10-year term certain annuity, you can convert it to a 15-year term certain annuity. If you opt for a longer term, your monthly payments will decrease. Likewise, if you opt for a shorter term, they will increase.

Beneficiary protection.If you die before receiving the total amount in payments from your annuity, your beneficiary will receive the value of your contract at the time of your death in either a lump sum or via installments.

Levelized payments. This allows you to opt for fixed payments rather than variable payments once you annuitize. The payments are recalculated each year to reflect the performance of the annuity's investments. If the investments perform well, this option allows you to receive fixed payments while gaining a hedge against inflation.

Brent Hamann, general manager of Allstate Distributors, says that the number of people who plan to annuitize is about to "explode." "As baby boomers get closer and closer to retirement, they're shifting their focus from asset accumulation to income management," he says.

Hamann says the cost of the Putnam Allstate Advisor VA will not increase as a result of the new features. "We feel the costs to offer these features are going to be offset by additional sales," he says. "We didn't feel the need to change the pricing on the products."